Solar Demand Surge

Asian Solar Demand Ramps Up

The dreaded year for solar was 2011, when prices fell 61 percent, mostly due to sub-priced Chinese panels flowing into Western markets.

But ironically enough, China is one nation where solar demand is surging – along with Japan.

China is beginning to alleviate supply gluts in its efforts to increasing domestic solar installations by a factor of five by 2015. And since Japan decommissioned most of its nuclear reactors following the Fukushima Daiichi tragedy, the government is leaning toward renewable sources like solar through incentives and utility installations.

Chinese and Japanese demand in solar is expected to reach 9 gigawatts in the second half of the year, Business Spectator reports, accounting for a 100 percent increase in demand from the previous half.

But the most activity you’ll find when it comes to the PV market will be in Japan – accounting for 150 percent growth in 2013.

As a result of the higher demand, prices are going up: polysilicon prices hit well over $17/kg, and Chinese modules hit .75/watt and .86/watt internationally.

This surging demand will come as a relief to Chinese companies that are going through a survival-of-the-fittest stage ever since the Chinese Development Bank cut off credit and loans to its solar companies.

Chinese cell producers made shipment at 116 percent in June 2013, with module companies operating at 99 percent efficiency and 84 percent for companies in Taiwan.

U.S. Reaction

The U.S. is undergoing an increase in solar demand of its own, but not necessarily because of Asia.

States like California, North Carolina, Arizona, and New Jersey, which represent 70% of the domestic demand for solar PVs, will help the U.S. increase solar demand by an estimated 20% in the second half of the year, Clean Technica reports.

And utility projects out in Arizona, California, New Mexico, and Texas will make up 2.5 GW of demand for the remainder of the year.

Looking ahead, U.S. demand for solar will likely surpass the 5 GW mark by 2014, a surge of 70 percent in compound annual growth since 2009.

Other Nations Going Solar

Germany has always been a beacon of the solar industry. The government has plans for the nation to operate on 50 percent solar power by 2050.

In late 2012, Germany added 60 GW of solar power. The nation, like China, cut off subsidies to its solar companies, but government initiatives sparked a new program where residents can get a 30 percent discount on any solar storage devices and can be handsomely rewarded for any power they can contribute to the national grid.

In fact, German utility company RWE (ETR: RWE) was forced to cut back on fossil fuel capacity due to growing renewable competition.

Asia is compensating for a demand retraction in European markets, but there is still the United Kingdom, which is still the fastest growing market for solar in Europe.

The U.K. government is looking for diverse ways to bring power to the British Isles, with nuclear, shale gas, and North Sea oil revival on the agenda, but officials are also hoping to add 20 GW of solar power by 2025.

And Japan may be fastest when it comes to demand, but China will be the fastest solar market for PV installations, with rooftop installations surpassing ground-mounts in the second quarter.

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If you’re interested in large-scale solar projects in the American west, check out Warren Buffett’s solar play through the MidAmerican Holdings purchase of two solar projects in Kern and Los Angeles, California, titled the Antelope Valley Solar Projects.

In the U.S., Sunpower (NASDAQ: SPWR) went up 265 percent since the start of 2013 – also reaching full capacity after years of gluts stemming from Asian demand.

Canadian Solar Inc. (NASDAQ: CSIQ) exceeded its 380 megawatt target, hitting 455 megawatts in the second quarter. Its shipment doubled in the first quarter as a result of stronger demand from Japan. Stock for Canadian Solar is up 267 percent this year.

And keep an eye on SolarCity (NASDAQ: SCTY) – a company whose chairman is Tesla (NASDAQ: TSLA) CEO Elon Musk and whose solar technology enhanced the battery life of Tesla cars.

In China, the world’s largest panel maker Yingli Energy Holding (NYSE: YGE) also exceeded panel expectations for this year.

JinkoSolar (NYSE: JKS) made its first profit since 2011, but it may not be able to meet full demand. In fact, the company is nearly sold out until October.

Trina Solar (NYSE: TSL) increased its solar panel shipment forecast for 2013 to 2.4 gigawatts as opposed to a range of 2 to 2.1 gigawatts. And the company delivered 647 megawatts worth of panels in the second quarter – up 54 percent from 2012. Trina cited strong demand growth from Japan and India as reasons behind the increased production.

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